At =mc we are constantly reflecting on what could improve training and development initiatives, especially in terms of supporting real change in organisations.
A challenge that is often cited to us is how best to achieve participant engagement, not just during training programmes but ahead of, and then following any development. Engagement is essential in order to create real behaviour change and encourage self-development. We know that when high levels of engagement are achieved, it can have a huge impact on learning transfer and so have a bigger impact on organisations and teams. People are also more motivated to get the most out of their development. So how can this best be achieved?
To answer this question, we have been taking a closer look at one of the rising schools of thought, behavioural economics to see what, if anything, it can teach us in learning and development.
Traditional economics argues humans are rational beings who show they are acting rationally by conducting benefit/cost analysis, assessing the usefulness of options, and then making decisions. This is how we like to think we choose where to live, approach our career options, what we want to learn, and even frame our ‘healthy selection’ at restaurants.
Behavioural economics on the other hand says we are sometimes rational, but most of the time our rationality is limited by: our ability to work things out logically, the large amount of information available, the limited relevant knowledge we have, and our own lack of time and energy. In these cases – whether we are deciding on donating to charity, buying services or goods, signing up for events, or even considering dating choices – we make decisions based on mental short cuts, or heuristics.
These heuristics form part of the framework developed by psychologist Daniel Kahneman, regarded as the founding father of behavioural economics as a discipline. His book summarising his award winning ideas, Thinking, Fast and Slow (2011), and a body of wider work, has influenced what we know about decisions, risk, and even happiness.
Over the past year, =mc Director, Bernard Ross has been sharing his research in this area across the world from Holland to the USA, particularly looking at how this decision science has an impact on how the sector approaches its fundraising efforts. He has recently written a book on the topic with Omar Mahmoud, Chief of Market Knowledge at UNICEF International. (UNICEF are using behavioural economics to help engage supporters more in campaigns and fundraising with some success.)
If you are interested in understanding more about behavioural economics, we suggest you read this article first.
In order to explore behavioural economics further and question its place in learning and development, we held a thought leadership event earlier this month.
At the event, we shared some of the key heuristics of behavioural economics with L&D practitioners from organisations across the non-profit sector, from the British Red Cross to Arthritis Research UK, and Macmillan to UNICEF.
During the session we focused in on three key heuristics:
|Heuristic||What does this mean?|
|1. Anchor it||People respond, often unconsciously, to an initial stimulus in their subsequent choice. So by carefully planning stimuli in situations we can influence the choices they make. For example by asking someone for a big initial commitment e.g. being a volunteer for a year, which they inevitably turn down, they will often respond more positively to a follow up ask of a day’s volunteering.|
|2. Put it in a Frame||The context or frame in which something is experienced makes a difference to the result. So by being clear on how we frame a choice, we can influence how people reach decisions. For example by suggesting that something costs less than the price of a cup of coffee a day e.g. £2.50 – an investment seems more reasonable than a full year cost of £900.|
|3. Make it Social or Normalise it||A person is more likely to take part in something if it seems normal for another relevant person to do it. For example, by offering employees a small gift and a personal email from the CEO asking them to contribute to an employee giving scheme, an organisation was able to improve participation from 5% to 17%.|
We also mentioned the following additional heuristics:
|4. Make Progress||We like to see progress to a result and to contribute to it. Therefore, giving people a sense of progression informs their response. (Think of how a download bar encourages you to wait for software to work.)|
|6. Avoid Loss||A very basic piece of mental programming means we are keener to avoid losses than to avoid gains. Sadly that means portraying the negative consequences to you of not attending a learning session could be more important than the positive vision of what the session could give you for attending.|
|7. IKEA Effect||We ascribe a high value to anything we have been involved in making, and this is out of proportion to its true value. (As in IKEA furniture we have assembled.) To engage members of staff more, ask them to get involved – focus groups are a good way to increase engagement.|
Note there are many other heuristics. Some scientists estimate there may be as many as 150 of these.
We then looked at how an awareness of these heuristics might help L&D with increasing participant engagement, and therefore ultimately behaviour change.
We asked L&D practitioners to consider three areas:
What we tend to do – ‘the traditional approach’: People know what skills they need to develop; therefore ask them what L&D or training they need this year, often as an open question. This is usually a question on the back of appraisal forms.
The problem: this is ignored, or provides L&D functions with an overwhelming amount of data that is not structured, or even useful. Ultimately this doesn’t help organisations provide value for money when it comes to training, as participants may not fully consider the results the training may deliver.
What we tend to do – ‘the traditional approach’: we publish the courses on offer that year and invite staff to sign up, with their manager’s approval. Or we target key members of staff in need of some development.
The problem: the development isn’t prioritised in people’s diaries and there may be no shows on the day or a lack of engagement in the room.
What we tend to do – ‘the traditional approach’: encourage participants to take their action plan forward and seek support from their line manager or fellow peers from the programme to ensure continued learning. This is often following a session on action planning during the programme and a suggestion of next steps to enable learning transfer.
The problem: this is often ignored, or not prioritised by participants once they return to work.
So is behavioural economics the silver bullet we’ve been waiting for in learning and development?
Well, the ideas above are not rocket science. However, what behavioural economics can teach us is about how people make decisions and why. This then enables us to better prioritise how we assess, communicate and roll out our learning and development initiatives.
With that in mind, what this school of thought can help us with is:
While making sure that the insights are used wisely and we are:
Contact us online for more information on how we can help you to think about how to use behavioural economics in your learning and development practice or call Philly Graham, Senior Consultant, on +44(0)20 7978 1516.